Effect of Financing on Earnings per Share Henriksen Co., which produces and sells biking equipment,...
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Effect of Financing on Earnings per Share Henriksen Co., which produces and sells biking equipment, is financed as follows: Bonds payable, 5% (issued at face amount) $6,000,000 Preferred $2.00 stock, $100 par 3,000,000 Common stock$25 par 5,000,000 Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is (a) $900,000, (b) 51.100,000, and (C) 51.500,000. Based on the data , what factors other than earnings per share should be considered in evaluating these alternative financing plans?
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